Case Study Analysis of Turner Test Prep

Situation Analysis
Jessica turner started her own test prep business in 1997 after being rejected several times by the Big Six accounting firms. Her frustration made her look for different career options and the expertise she had garnered from her previous job of working in a test prep company helped her set a goal of starting her own company. She was one of the 25 percent of students who had cleared all sections of CPA (Certified Public Accountant) on the first try. She acquired funding from a local venture capital firm and set up her business in the San Francisco Bay area to tap into the potential of being able to target a chunk of students since a lot of businesses were concentrated in the area. To market her company she placed ads and flyers in the business schools and also made the local businesses cognizant of her program. Her main competitor is NTC (National Testing Centers) which has been in existence since 1962. It offers test preparation for nearly every standardised test available and therefore is able to nearly enjoy monopoly because it has a lot of repeat customers. It is able to tap into students taking the SAT exams and is there preferred choice when they take graduate test preps. This helps NTC capture majority of the market. Even though Turner Test Prep has been in business for 3 years and is enjoying an increase in the number of students, it only has a market share of 10%. Jessica has made her course distinct from NTC by offering live classroom sessions, one to one mentoring to all the students and has used all her methodical skills to ensure that her students are able to clear the exam on the first try, but she is still unable to create a decent foothold in the market. She also faces the dilemma of how her business has been doing over the years and the current status in financial terms and is thinking about reworking her approach to ensure sustainability in the market.

Problem Identification
Primary Problem

Lack of Proper Business Plan She did not factor in how she would grow her business and expect profitability to ensure sustainability in the market. (Missing on ROI, Break-even analysis etc.)

Secondary Problems

Only focused on CPA exam, thus reducing her own market, as this is a cyclical industry demand for the course is only twice in a year and non-existent business in the majority of the year. Because of the above- only a meagre market share of 10% Absence of other test prep courses SAT, GRE, GMAT etc. No business partners that would have helped her grow and align her business to her vision. Lack of technology online courses for other geographical locations. (Web sessions, video conferencing etc.)

Character Analysis
Jessica Turner

Strengths of the character Methodical Steadfast and persistent

Weaknesses Very susceptible to emotions Impulsive

SWOT of Turner Test Prep

Strengths Very methodical approach Live classroom teaching High success rate

Weaknesses only focused on CPA exam only present in Bay Area Lack of marketing/branding

Opportunities Offer more courses to access more market Expand geography Offer online courses

TTP

Threats
Entry of newer players

Existing players also offering Live classrooms Market decline because of recession and lack of jobs CPA job profile becoming redudant and replaced

Tie up with businesses to offer training for employees

Generation of Alternatives
1. Increase in the number of test prep courses
Pros Bigger market access More repeat customers More revenue generation Cons Higher costs incurred because of more trainers and resources Would require partnership(s) for sustainability

2. Expand the market by opening more branches in different location(s)/geography

Pros Can have first mover advantage More revenue by charging premium in the absence of already established players Increase in the number of customers

Cons More investment/funding required costs of business and marketing resources Risks involved would be greater, sustainability and profitability.

3. Increase in marketing of the present business within the Bay Area Pros Can use the success rate of the Turner Test Prep as an advantage to boost business Cons
Increase in budgeted costs because of higher marketing spend.

4. Implementing technology to offer online courses via video conferencing and recording videos and tutorials

Pros Increase in market share by access to bigger market and geography More revenue generation Can be translated into other languages to help other ethnic/racial groups Cons Piracy would make the business redundant Web platform maintenance costs.

Suggestion(s)

A. In-depth business plan to help plan out the effective cash flows and ROI of the venture in tune with the realistic break-even analysis and backup plans. B. Collaboration with other cross-functional individuals that would help establish the company and strengthen it. C. To not narrow our own market share by being overly focussed on our core competency but to use it as a leverage to gain/increase our market share and reach. D. To be proactive in use of technology as an enabler to boost the business. E. To focus on the needs of the customer instead of the product/service. F. To not focus on cutting costs but on cost optimization. G. To use all marketing tools for effective and efficient brand building.

Learnings

A Business plan that lacks effective planning of resources including ROTI (Return on timed investment), Break-even analysis, back-up plans is redundant regardless the idea is top notch. What may seem as a lucrative venture could turn out to be a disaster if we fail to understand the sustainability/feasibility in the market. This can be done by performing market research, consulting with experts and analysing existing player(s) in the industry. Risks are always associated with any business, but taking blind risk(s) is a fools errand, we should always take calculated risks to minimize and mitigate their impact if things go dire. To always use available technology as a leverage to our business and not be overtly focussed on one business idea or goal assuming that its unique and no one else would be able to copy or produce it in the market.